Recently, Wall Street and the Financial Media have brought much attention to the flattening and possible inversion of the U.S. Treasury yield curve. Given the fact that an inversion of the 2s/10s Treasury yield curve has predicted every recession over the last forty years, it is no wonder that the topic grows in stature as the difference between the 2-year Treasury yield and the 10-year Treasury yield approaches zero. Unfortunately, much of the discussion on the yield curve seems to over-emphasize whether or not the slope of the curve will invert. Waiting on this arbitrary event may cause investors to miss a very important recession signal.

The Incentive to Lend

A friend approaches you and asks for a loan. You are presented two options, lend her money for two years at 2% annually or for ten years at the same 2% annual rate.

Later that day, another friend approaches you for a loan. This time you have the option of lending money for two years at 2% or for ten years at 6% annually.

For the lender/investor in both cases, we will ignore inflation risk and assume the two borrowers are in similar financial circumstances. Given the options, you likely answered that if you were forced to lend in example one, it would be only for two years as lending for ten years produced no additional financial incentive to compensate for the additional eight years of risk. Keep in mind most of us would not lend for two years either due to the low-interest rate.

In example two, you may have been incentivized by the higher ten-year interest rate the borrower was willing to pay you. In example one, the “yield curve” is flat at 2%. In example two it is considerably steeper as 10-year “yields” are 4% higher than 2-year yields.

As portrayed, when investors are faced with a flat or inverted yield curve, their incentive to lend for longer terms is greatly diminished. The opposite holds when the yield curve is steeper as in the second example. Taking this one step further, when the absolute level of yields is very low, the incentive to lend, irrespective of the slope of the curve, is also greatly diminished.

When lenders have no financial incentive to extend credit, economies dependent on ever-increasing amounts of credit tend to struggle.

Yield Curve Predictive History

The graph below plainly shows that when 2-year Treasury yields exceed 10-year Treasury yields, otherwise known as “a curve inversion,” a recession has always followed. Following the inflection point of the inversion, as circled, the curve steepens through a recession and for some time afterward.

Data Courtesy St. Louis Federal Reserve

Given the curve is approaching the inversion point (black line), this compelling evidence is supposed to convince us that the odds of a recession are currently increasing but, and this is important, a recession is not a foregone conclusion yet. While a solid argument based on history, it rests on the theory that there will not be a recession unless 10-year yields drop below 2-year yields (black horizontal line in the graph).

There is another significant trend in the graph, which has gone largely unrecognized. The table below shows the lowest readings of the 2s/10s curve occurring before each of the last five recessions. It is the point of maximum curve inversion for each cycle.

As shown, the magnitude of the greatest yield curve inversion has steadily declined in each of the past five pre-recession episodes.

Increasing Debt Burden and Tight Lending Conditions

The graph below compares total domestic Debt and GDP.

Data Courtesy St. Louis Federal Reserve and Bloomberg

The graph highlights that debt is growing faster than GDP, with GDP representing our collective ability to service repay our debt. In this situation, it takes increasingly greater amounts of debt and lower interest rates to service the existing debt as well as generate new economic activity.

With this troubling dynamic in mind, think back to the two lending propositions we presented earlier. As the yield curve flattens and, by default, lenders are less likely to lend money and economic activity so dependent on that lending activity, slows.

If you accept that line of reasoning, then you must also agree that economies with larger debt burdens are more sensitive to a tightening of financial conditions. Taking it one step further, the amount of inversion required to generate a recession in such a scenario also declines. Might we now be at the point where inversion is not required, and a flat enough yield curve will hamper borrowing and stymie economic activity?

Summary

Based on history, one may deduce that if the curve were to steepen from this point, the odds of a recession decline. We strongly disagree. Given the incremental debt accumulation that has occurred as compared to the accumulation before those five prior episodes, financial conditions have more than likely already tightened enough to induce a recession. The recent steepening of the curve, which might be misinterpreted as a relief, is a flashing red signal that a recession is still very much possible.

For those of you that are stubborn and waiting on the curve to go to zero to sound the recession warnings, we share the graph below, courtesy of Crescat Capital LLC.

The graph looks at numerous yield curves and computes the percentage of them that were inverted at various points of time. Note that about 40% of curves are currently inverted. Have the collective curves already sounded the alarm, but everyone is too focused on a flat 2s/10s curve to hear it?

]]>https://capitalisthq.com/politics/yesterdays-perfect-recession-warning-may-be-failing-you/feed/0How The Left Is Using Corporations To Shut Down Conservative Speechhttps://capitalisthq.com/politics/how-the-left-is-using-corporations-to-shut-down-conservative-speech/
https://capitalisthq.com/politics/how-the-left-is-using-corporations-to-shut-down-conservative-speech/#respondFri, 22 Feb 2019 02:25:17 +0000https://capitalisthq.com/politics/how-the-left-is-using-corporations-to-shut-down-conservative-speech/

On January 8, the restaurant chain Red Lobster became the 20th major advertiser to stop running ads on Tucker Carlson’s Fox News program. It’s not because advertising on Carlson’s show won’t get you in front of millions of viewers — Carlson has the highest ratings among cable news networks in his prime-time slot, and Fox News has been the highest rated basic cable network for over two years. Carlson has been the subject of a highly organized, and apparently effective, boycott campaign.

It’s true that he has made some controversial statements in the past year, but it’s also impossible to argue that he’s not one of the more interesting and essential pundits of the Trump era. The same week Red Lobster announced it was abandoning his show, Carlson delivered a monologue arguing that conservatives placed too much faith in their conception of the “free market” and needed to question whether the economy was rigged to benefit elites. The monologue touched off a fascinating conversation among intellectuals across the political spectrum.

Washington Post columnist Christine Emba found herself reassessing the caricature of Carlson and asking, “What happens when Tucker Carlson makes sense?” The left-wing publication Vox declared, “Tucker Carlson has sparked the most interesting debate in conservative politics.” The New York Times’ right-leaning columnist Ross Douthat declared the “Fox News host amplifies a debate the right needs to have.” Meanwhile, conservative pundits David French and Ben Shapiro offered sharp criticisms of Carlson’s monologue from the right.

There are numerous other instances of Carlson contributing positively to the public dialogue that should be weighed against a handful of controversial remarks. Further, there’s little reason to believe that anything Carlson has said is outside the bounds of acceptable discourse.

There is, however, pervasive evidence showing that left-wing activists are quite content using every tool at their disposal to silence influential voices on the right. The question is whether they’d thought through the disastrous consequences of normalizing politically motivated boycotts.

Even as thinkers and journalists were having an illuminating and productive debate over Carlson’s monologue on the role of the free market, others were busy stoking the boycott against him. “The Tucker Carlson advertiser boycott continues, and what’s wrong with that?” asked Pulitzer-winning Los Angeles Times columnist Michael Hiltzik in a column last month. “Those unhappy with Carlson’s brand of exclusionary white male power should keep the boycott threat alive — and they should consider themselves to be operating in the American mainstream.”

Now if there’s a case to be made that Carlson’s charged comments about diversity, nationalism, and immigration are outside the American mainstream, the question also ought to be asked whether anyone on the opposite end of the spectrum that deploys racially loaded generalizations about “exclusionary white male power” at the drop of a hat is operating in the mainstream as well. Repeated suggestions that Carlson isn’t merely disagreeable, but that he’s racist, aren’t just unfair. They have dangerous consequences. Earlier this year, violent left-wing Antifa activists showed up outside his home, menacing his wife.

At the same time, there’s no real evidence that politically motivated boycotts, which are largely a tool of the left, are operating in the American mainstream. The skewed presentation of the debate by a left-leaning media; the fact that there are no organized boycotts on the right due in part to a principled commitment to free speech; and the vagaries of craven corporate branding strategies all suggest that support for boycotts might be an illusory phenomenon.

Sleeping Giants to the Fore

If you think a robust public debate involving many differing viewpoints is a precondition for healthy democratic debates—and let’s face it, increasing numbers of politically motivated people don’t—a cursory examination of the organization driving the Carlson boycott ought to be alarming. They go by the name Sleeping Giants. The organization is really just two people, Matt Rivitz and Nandini Jammi, who direct almost all of Sleeping Giants’ boycott activities around a Twitter account and Facebook page. The name “Sleeping Giants” might be a bit of a misnomer. Their Twitter account has only 218,000 followers and their Facebook page has just 56,000 followers, neither of which is much in relative terms. Tucker Carlson has 2.4 million Twitter followers, and Fox News has 18.6 million. (In the interest of disclosure, my wife, Mollie Hemingway, a Fox News contributor who has appeared on Carlson’s show, has 220,000 Twitter followers, which is also more than Sleeping Giants’ total.)

Nonetheless, Sleeping Giants first rose to prominence by forcing dozens of brands to stop running ads on Breitbart.com by simply having its followers tweet screen-shots of advertisements on the site at the Twitter accounts of the corporations behind them. Regarding Breitbart, in nearly all cases the ads are part of digital ad networks, such that the original advertisers have no idea where they appear, and they appear at a diverse array of sites. In other words, there was never any reason to believe that because an ad appeared on Breitbart’s site that the corporation behind it was in any way endorsing the message.

Breitbart is hardly the only place on the internet attracting controversy. Despite doing any number of provocative and harmful things, Gawker, for instance, never wanted for corporate advertising, right up until a jury effectively ended the publication by ruling it owed millions of dollars in damages for its egregious privacy violation—and releasing a video of Hulk Hogan having sex unaware of being filmed was just one of hundreds of very questionable editorial decisions the site made over years. Despite no shortage of bad actors, Breitbart is, however, the only website that’s been targeted for a very successful two-year boycott campaign.

Further, insensitive or incendiary sentiments regularly repeated by left-wing media outlets seem to escape the same kind of scrutiny for offense that have been applied to Breitbart. It’s not a stretch to see why headlines such as “There’s No Hiring Bias Against Women in Tech, They Just Suck at Interviews” might cause corporate advertisers to back away from Breitbart. But you don’t see advertisers backing off of “mainstream” outlets such as the Huffington Post or The Guardian because they’ve run flattering articles on the #ShoutYourAbortion movement, which is the kind of abortion activism that can easily be shown to be offensive and off-putting.

At the same time that voices from the right are being targeted, the kinds of left-wing sentiments that can be published on major outlets has shifted dramatically, with no corresponding pushback or attempt at self-correction. “Can you admire Louis Farrakhan and still advance the cause of women? Maybe so. Life is full of contradictions,” is a real headline that ran over a January op-ed in the Los Angeles Times. Barely an eyebrow was raised over the paper publishing excuses for a virulent anti-Semite who in just the past year has called Jews “termites” and “Satanic” and said “the Jews have control over those agencies of government.” Certainly, there was no Sleeping Giants boycott campaign, even though that L.A. Times piece is arguably more overtly bigoted than anything published at Breitbart.

Sleeping Giants has complained that Twitter still allows Farrakhan a platform, but in searching its site it has done nothing to address Democratic politicians and left-wing groups such as the Women’s March that have cozied up to the Nation of Islam leader. According to its Facebook page, Sleeping Giants has even worked with “our friends” at the Women’s March on their boycott efforts, despite the fact that Women’s March leaders such as Linda Sarsour and Tamika Mallory have also been vocally anti-Semitic and supportive of Farrakhan.

Rivitz told The New York Times he viewed what he is doing “as an apolitical crusade against hate speech. While he is a registered Democrat, he said he had never been politically active outside of attending ‘maybe two marches pre-election.’” He further defended the Sleeping Giants boycotts as apolitical in an interview with GQ saying, “When the focus is on bigotry and sexism and violence, those are unassailable points.” Rivitz further dismissed any idea that anything they are doing might amount to censorship in an interview with Ad Week. “A lot of people say voices on certain sides are being silenced, and ultimately, that’s a way to muddy the waters and make it about politics versus what it really is, which is xenophobia and racism,” he said.

Yes, in the abstract, bigotry, sexism, and violence are unassailably bad. In reality, determining whether something qualifies sexist, bigoted, or violent can be the subject of a heated political and cultural debate. (Even “violence” is no longer a cut-and-dried thing; if you’ve been near a college campus lately, the Orwellian idea that “speech is violence” has taken firm hold.)

These questions, contrary to Sleeping Giants’ smug certainty, are not easily settled. One of Sleeping Giants’ self-proclaimed rationales for instigating boycotts is being “anti-LGBT.” But what does that mean? Tens of millions of Americans still oppose gay marriage, meaning as a practical matter they adhere to the view Barack Obama and Hillary Clinton and half the Democratic Party establishment professed until mid-2012. Are all these people so irredeemably bigoted that their views should be not allowed to be aired publicly? What about people who support religious liberty laws that would provide conscience protections for Christian florists and bakers who don’t want to be compelled to participate in same-sex weddings? Are people such as Andrew Sullivan and Supreme Court Justice Elena Kagan to be boycotted for siding with “anti-LGBT” forces on this issue?

Sleeping Giants has made no attempt to define its criteria for what is and is not acceptable as a matter of public discourse. The fact that Sleeping Giants has no established criteria for justifying a boycott is also troubling, because organizations with ill-defined goals are subject to mission creep. The organizers told GQ that the reason they are pushing a boycott of NRATV is because “the NRA pushes racially-charged programming and anti-media propaganda using these streaming services.” Aside from the fact that the NRA has been making conspicuous attempts at minority outreach for a long time now, complaining about media bias—which is an easily demonstrable problem when it comes to coverage of gun issues—is a very low bar for justifying a boycott.

Sleeping Giants has also taken activism in this area a step further, having targeted Apple, Amazon, Roku and Google for allowing NRATV on their streaming platforms. Such “de-platforming” tactics suggest that Sleeping Giants isn’t merely pressuring the NRA so it will stop using rhetoric Sleeping Giants doesn’t like, which is a very tiny percentage of the content on NRATV. Instead, it wants to silence the outlet altogether.

The truth is that Sleeping Giants does have at least one definitive criteria for whether a publication or organization is boycott worthy. It’s just too lacking in self-awareness to realize it. “After the election, we just couldn’t believe that the guy who pushed Breitbart’s racism and bigotry was going to be in the White House,” Rivitz told GQ. “At the time, we were painfully unaware of everything that goes on at that site.”

To some extent, Sleeping Giants’ mission is explicitly about hamstringing a duly elected president of the United States. Now, it is perfectly fine to despise Donald Trump and campaign against him, but saying as much is a degree of basic transparency that Sleeping Giants hasn’t quite managed. If you’re are horrified by the fact 63 million Americans voted for a president you abhor and your first thought is to try and shut down a prominent media voice that supported him, then telling the New York Times you see your work as “apolitical” is either delusional or dishonest — or some combination of the two. But Sleeping Giants presenting itself as a group of concerned citizens, rather than political activists, makes its efforts more effective.

It’s remarkable that Sleeping Giants has been able to get away with such duplicity for so long, but ultimately unsurprising. The group has garnered the attention of a lot of prominent media outlets, and the resulting profiles are so softball that you’d think they were written by someone drinking a beer in the outfield bleachers. Some of the coverage even reads as if it is specifically designed to help with Sleeping Giants’ pressure campaigns. See this headline from Fast Company: “Thousands of Advertisers Shun Breitbart, But Amazon Remains.”

There are enormously harmful consequences to free speech that will arise in a culture where politically motivated boycotts are the norm. Yet, no one who’s interviewed the organization seems all that concerned about a potential backlash. GQ did ask if Sleeping Giants was concerned about giving rise to counter boycotts, but the unquestioned response was rife with hubris: “The First Amendment applies to everyone. If they want to do something like that, they can certainly try. But at least in our minds, the message wouldn’t ring true.”

One reason the two organizers of Sleeping Giants weren’t too worried about pushback against their efforts is that they were quite content to lob accusations against others anonymously. The first New York Times profile on Sleeping Giants, another puffy piece headlined “How to Destroy the Business Model of Breitbart and Fake News,” mentioned a curious fact: Sleeping Giants’ co-founders “requested anonymity because some members of the group work in the digital-media industry.”

After more than 18 months of successful boycotts and glowing coverage, it wasn’t until last summer that we learned the identities of Rivitz and Jammi, who are both freelance copywriters in the advertising industry. While there’s no obvious reason to believe they have motives beyond expressing their obvious partisan politics, the fact they both work in advertising raises the possibility of so many conflicts of interest that it was professional negligence for the media to mostly ignore their background and honor requests for them to remain anonymous.

The only reason the world learned Rivitz and Jammi’s identities was due to reporting done by The Daily Caller News Foundation, the publication co-founded by, yes, Tucker Carlson. Rivitz was quite upset about being revealed and complained of threats being directed at him as a result. Yet, as of December, he was still encouraging people to send letters to advertisers smearing Carlson as a “white nationalist,” the kind of inflammatory characterization that has led to threats on Carlson’s own family. With the heated nature of current political debates, the desire to remain anonymous while still participating in the conversation is an impulse that should be respected. But given the nature of Sleeping Giants’ campaign against public figures, this was a stunning act of hypocrisy.

The passively assumed reason for granting Rivitz and Jammi’s anonymity — the idea that because they “work in the digital-media industry” their work with Sleeping Giants could negatively affect their careers — also turns out to be a lousy excuse. Ad Week asked Rivitz point-blank if his involvement with Sleeping Giants being revealed had affected his day job. Quite the contrary, as it happened. “I’ve had love and support from people I know,” he replied, “and lots of people I don’t know hitting me up on LinkedIn.”

Advertisers’ Leftward Lean

For decades, one of the distinguishing features of the left was that it was suspicious of corporate power, and specifically the insidious influence of corporate advertising. Though less well known than “1984” or “Animal Farm,” George Orwell even wrote a novel, “Keep the Aspidistra Flying,” that railed against advertising as “the dirtiest ramp that capitalism has yet produced” and he later warned, quite correctly, that “advertisers exercise an indirect censorship over news.” More recently, Naomi Klein’s 1999 book, “No Logo: Taking Aim at the Brand Bullies,” became hugely influential for crystalizing the left-wing, anti-corporate sentiment behind the violent anti-globalization protests of the time.

But like every other institution that has proven to be an impediment to liberal political goals, the strategy adopted by the left toward advertising seems to have been “if you can’t beat them, assimilate them.” The left-wing nature of corporate advertising has become remarkably prevalent in a comparatively short amount of time.

It wasn’t that long ago that corporations didn’t want to go near anything that appeared remotely political. In Samuel Huntington’s 1996 book, “Who Are We?,” he recounts how in 1996 Ralph Nader—no one’s idea of a right-wing xenophobe—wrote to the CEOs of 100 of America’s largest corporations and urged them to have their boards of directors open their shareholder meetings by reciting the Pledge of Allegiance as a way of showing corporate gratitude for receiving government subsidies. In other words, when it comes to declaring “you didn’t build that,” Nader was way ahead of the curve. Only one corporation, Federated Department Stores, responded positively. The rest rejected the suggestion, and some corporations such as Ford, Costco, and Aetna publicly disparaged Nader’s gambit.

Contrast that reaction with how last autumn, Nike swallowed a left-wing narrative whole and made a mediocre quarterback who hasn’t played in the NFL for years the face of a major national ad campaign. Far from avoiding unifying national sentiments, the only reason Nike is embracing Colin Kaepernick is his polarizing campaign to politicize the NFL by encouraging national anthem protests. Most recently was Gillette’s baffling and ham-handed attempt to cash in on the #MeToo phenomenon. The razor company aired ads questioning the virtues of masculinity, which made it seem, in the words of American Enterprise Institute scholar Christina Hoff Sommers, as if “Gillette has been hijacked by the Oberlin College Gender Studies Collective.”

To be clear, it’s not that the underlying issues involved in these ad campaigns — racism and sexism — aren’t serious and worth addressing. But there’s a real question as to whether profit-driven corporations — especially ones such as Nike and Gillette’s parent company, Procter and Gamble, which have routinely faced ethical questions about the way their products are produced — can wade into social and political issues without increasing cynicism. If you go to Gillette’s webpage, it declares that “it’s time we acknowledge that brands, like ours, play a role in influencing culture. And as a company that encourages men to be their best, we have a responsibility to make sure we are promoting positive, attainable, inclusive and healthy versions of what it means to be a man.” This prompts a serious question: Where on earth did Gillette get the idea it has any obligation to consumers other than producing quality razors at a reasonable price? (Note that as of this writing Gillette’s ad has 1.4 million dislikes on YouTube compared to 700,000 likes, and the company is furiously deleting negative comments.)

At least one notable figure in the advertising world is sounding the alarm about how advertiser boycotts and politicized branding could be bad for business. “Nobody’s going to these brands to ask, ‘How should I live my life?’” says Dan Granger, the CEO of Oxford Road, an ad agency that launched Hulu, Lyft, Dollar Shave Club and lots of other notable brands. “We don’t really want to be preached at by mainstream brands. And it really depends on how big a brand wants to be.”

Granger has a distinctive perspective on advertising, because his firm specializes “performance-based” metrics specifically tailored to encourage quick business growth. Unlike Sleeping Giants, Granger isn’t coy about his professional motives for speaking out. “I’m definitely incentivized to urge my clients to pursue advertising programs that are going to help them grow in measurable ways, and when they take one of the greatest sources of customer growth off the table and take that out of our toolkit it’s bad for us,” he says. “It’s bad for them. So I’ve got some skin in the game, and it’s an issue I’ve been dealing with on some level for probably the last 15 years, which is almost my entire professional career.”

However, if you’re familiar with late-stage corporate branding strategy, viewing advertising as a means to increase sales or to juice growth is a notion that’s almost quaint. Instead, advertising is often discussed in terms of how it defines a company’s “values” and other subjective measures that conveniently don’t involve metrics that would hold advertising agencies accountable for their work.

This values framework seems to be guiding the approach to advertiser boycotts. In 2017, an article in Ad Age addressed how corporations should handle boycott threats, and experts conceded that “there’s little evidence that [consumers] actually follow through. Many weren’t buying the given brand in the first place, for reasons that have nothing to do with politics or brand safety.” However, the article further cautioned: “An ad boycott is more about your long-term brand reputation. … These incidents likely have greater impact on sentiment from employees, government officials, suppliers and shareholders than consumers.” In other words, corporate decisions are disproportionately impacted by a small group of people who are overly sensitive to politics, regardless of what their larger customer base actually cares about.

Make no mistake, Sleeping Giants is just the latest iteration of overt and ongoing attempts to ideologically capture advertising. Other groups working with Sleeping Giants have driven this notion home. “You have to be inclusionary if you’re going to try to sell to a very large audience,” Nicholas Reville, a board member of the Participatory Culture Foundation, told the New York Times. The Times added that Reville “pointed out that businesses benefited from embracing diversity: And he pointed out that consumer activism might be especially effective because so many people feel they have no other way to express their opposition to Trump-ian values.”

There’s obviously truth in that last observation. But what’s motivating to some in the political realm is likely to alienate others. “They might be able to do a cheap move to get some PR for a while that ignites a base within their brand constituency,” says Granger, “but I probably wouldn’t advise a client to make a move like that, because I think it’s divisive. I think we’ve got enough divisions in this country and I think on the corporate side, we don’t need to exploit that. We need to start pushing back on it and going, ‘OK, how do we attract people to our value system rather than use our value system to point fingers and separate, whatever side of the equation you’re on?’”

This is all rather ironic because among the many remarks by Tucker Carlson that have spurred controversy and marshalled the most boycott enthusiasm, this monologue from September, directed at progressives, stands out:

How, precisely, is diversity our strength? Since you’ve made this our new national motto, please be specific as you explain it. Can you think, for example, of other institutions such as, I don’t know, marriage or military units in which the less people have in common, the more cohesive they are? Do you get along better with your neighbors, your co-workers if you can’t understand each other or share no common values? Please be honest as you answer this question. And if diversity is our strength, why is it okay for the rest of us to surrender one of our central rights, freedom of speech, to just a handful of tech monopolies? And by the way, if your ideas are so obviously true, why does anyone who question them need to be shamed, silenced and fired?

Simply questioning what is obviously a very politicized definition of “diversity” got Carlson branded a racist by the Washington Post’s Erik Wemple. (Wemple and Carlson have a longstanding feud.) But the charitable and more accurate reading of what Carlson was saying is that “celebrating diversity” can be divisive if we don’t first and foremost share a common identity as Americans.

Something similar was at work with Carlson’s more recent attention-grabbing monologue about whether we show too much deference to our notions of the “free market.” Asking whether the system is rigged in the current era of populist discontent doesn’t just resonate with Trump voters, it has loud echoes of the sentiments expressed by Naomi Klein and Occupy Wall Street protesters. No one is going to agree with everything Carlson says or deny he can be controversial, even infuriating. But if you’re paying attention, there’s ample opportunity to look at what he says and find ideas that the left and right can agree on. This is the real reason Carlson is so interesting, and why he’s often portrayed as more polarizing than he actually is.

Meanwhile, it’s the folks at Sleeping Giants who are utterly credulous about the role corporations should be playing in our politics. “It’s scary to say it, but maybe companies will have to be the standard-bearers for morals right now,” Rivitz told The New York Times. “We’ve all seen employee handbooks where they have codes of behavior,” he said. “Maybe that’s all we have to fall back on now.”

So there it is. Rivitz unknowingly revealed the ultimate pitfall of advertiser-based boycotts. (After reading that comment, Granger said, “I just threw up a little bit.”) Yes, boycotts are bad for a culture of free speech, but the biggest problem might be that they establish a baseline where corporate policies define the terms of political debate.

What Rivitz is advocating is frightening. Actual fascism—not the lazy definition that Sleeping Giants’ Twitter followers use to tar everyone from Mitt Romney on down—is what happens when corporate and political powers are merged for common national goals. Why Sleeping Giants and other supporters of advertiser boycotts would want to blur the line between advertising and propaganda here is worth pondering. Even George Orwell managed to warn against both advertising and fascism, and if you want to imagine a future where advertising boycotts are the norm, just picture the risk-averse HR drones who run corporate diversity seminars stamping on the face of public discourse—forever.

If being forced to contemplate an America that remains permanently politically divided seems scary, it also presents a chance for brave advertisers to get beyond the left-right divide. “I’d love to do an ad where you have the Rush Limbaugh and Elton John duet or Rachel Maddow and Sean Hannity. How you get these guys to actually say, ‘Hey, we stand behind this thing and not everything has to be a knifing of each other. We don’t have to disagree on everything … maybe we can maybe even be civil about it,’” says Granger. “There was an episode of Bill Maher where he had Ben Shapiro on that was really cool, because as different as their perspectives were, they were very civil with each other. You could imagine that these guys could break bread together and have a good time. I think that a lot of us are longing for that, and I think there’s an opportunity in it.”

America’s success over nearly 250 years is in some respects the result of branding campaigns and messaging that defined our values. The corporations in the 21st century that reject political division and sell us on “e pluribus unum” don’t just stand to benefit themselves—they’re going to help us all prosper.

Mark Hemingway is a writer in Alexandria, Va. You can follow him on twitter @heminator.

]]>https://capitalisthq.com/politics/todays-capitalist-news-report-news-capitalisthq-257/feed/0Trump: “I Want 5G, Or Even 6G, Tech In The US As Soon As Possible”https://capitalisthq.com/politics/trump-i-want-5g-or-even-6g-tech-in-the-us-as-soon-as-possible/
https://capitalisthq.com/politics/trump-i-want-5g-or-even-6g-tech-in-the-us-as-soon-as-possible/#respondThu, 21 Feb 2019 14:24:16 +0000https://capitalisthq.com/politics/trump-i-want-5g-or-even-6g-tech-in-the-us-as-soon-as-possible/

President Trump has finally hit upon the real issue at the center of the US government’s battle with Huawei: It’s all about the technology. To wit, one reason why US allies and the UK and Germany have been so hesitant to cut ties with the Chinese telecoms giant is that, as its founder pointed out in a recent interview with Western media, there is no real alternative. US telecoms like Verizon still lag their Chinese rivals when it comes to 5G.

So, in a series of tweets sent Thursday morning, President Trump exclaimed that “I want 5G, and even 6G technology in the United States as soon as possible” and demanded that “American companies must step up their efforts.”

I want 5G, and even 6G, technology in the United States as soon as possible. It is far more powerful, faster, and smarter than the current standard. American companies must step up their efforts, or get left behind. There is no reason that we should be lagging behind on………

And in what sounded like a concession to Huawei (and a tacit acknowledgement of the real motives behind the US’s anti-Huawei campaign), Trump said he would like US companies to “win through competition”…implying that this isn’t the case presently.

….something that is so obviously the future. I want the United States to win through competition, not by blocking out currently more advanced technologies. We must always be the leader in everything we do, especially when it comes to the very exciting world of technology!

Now, will Beijing appreciate this burst of honesty? Or, more importantly, will the outburst help inspire US allies like Australia and New Zealand – allies who are feeling the brunt of Beijing’s wrath over their decision to side with the US – to change their minds?

In footage leaked by YouTube channel Now This that looks like it was clandestinely filmed in a control room somewhere inside 1211 Avenue of the Americas, Carlson can be heard cursing out historian Rutger Bregman and dropping several expletives after the two got into a heated debate about the “globalist elite”.

The two had been calmly discussing the roots of income inequality and sharing their criticisms of the Davos elite (Bregman had just gotten back from a trip to the World Economic Forum) – and even sniggering about the obvious hypocrisy of liberal billionaires flying private jets to complain about climate change – before the conversation took a dark turn when Bregman brought up how polls show a majority of Americans are in favor of higher taxes on the rich (of course, that all depends on how you frame the question).

Bregman then dropped a few sly accusations about Fox News being owned by the billionaire class, and Tucker started to get very defensive.

Then Bregman went all-in and accused Tucker of being “part of the problem,” at which point Carlson exploded with rage (seemingly taking Bregman’s bait).

“You are a millionaire funded by billionaires, that’s what you are,” Bregman said.

“And I’m glad you now finally jumped [on] the bandwagon of people like Bernie Sanders and AOC, but you’re not part of the solution, Mr. Carlson. You’re part of the problem, actually.”

That gets Carlson heated, and he tries to defend himself – but Bregman just rips into him again.

“Why don’t you go fuck yourself,” he shouted. “You tiny-brain – and I hope this gets picked up, because you’re a moron! I tried to give you a hearing, but you were too fucking annoying.”

Fox declined to air the interview, but in a series of tweets, Bregman said he leaked it because he wanted the world to see the real Tucker.

1/ Here’s the interview that @TuckerCarlson and Fox News didn’t want you to see. I chose to release it, because I think we should keep talking about the corrupting influence of money in politics. It also shows how angry elites can get if you do that. https://t.co/hs1474MJNM

2/ I stand behind what I said, but there’s one thing I should have done better. When Carlson asked me how he’s being influenced by Big Business and tax-avoiding billionaires, I should have quoted Noam Chomsky.

3/ Years ago, when he was asked a similar question, Chomsky replied: ‘I’m sure you believe everything you’re saying. But what I’m saying is that if you believe something different, you wouldn’t be sitting where you’re sitting.’

The past five years have been baffling for gold bugs. In an environment of massive central bank money creation, rising government deficits and a populist takeover of many countries’ political systems – all of which should be great for safe haven assets – gold has spiked to around $1,350 four times, only to be smacked back down each time. Very demoralizing.

And now it’s gearing up for another try.

It’s obvious that the forces now at work in the world will eventually send terrified capital pouring into sound money like gold and silver — and that, from a technical standpoint, piercing $1,350 resistance should trigger a big, fast move to the next resistance level somewhere in the high $1,400s.

But the “when” part of this story has become an embarrassment, given the number of disappointments the past few years have dished out.

So why risk ridicule by going back there? Because, damn it, $1,350 will be not just pierced but shattered one of these days. And next week could be the week.

I know, Charlie Brown’s football, Einstein’s definition of insanity, Sisyphus’s boulder, some people never learn. But the world really is set up for serious instability, and two new factors have swung in gold’s favor since the last failed attempt.

First, central banks have become fairly aggressive net buyers of gold. Recall that not so long ago central banks as a group were dumping gold on the market in order to “diversify” their reserves into government bonds. Now they’ve apparently seen the error of that approach and are back to buying. See Central bank gold buying hits highest level in half a century.

This is a big, not-especially-price-sensitive new source of demand that might not view $1,350 as a reason to slow down.

Second, the Fed, which had been promising to tighten for years and then actually did tighten for one year was, like the proverbial mule, smacked in the head with a stock market two-by-four. That got its attention, and the tightening has stopped, to be replaced shortly with another, probably much bigger round of easing.

This aligns the US with other major countries, which are already easing. Japan, for instance, is now apparently doubling down on its high-fiscal deficit/NIRP experiment:

(Reuters) – Japan must ramp up fiscal spending with debt bankrolled by the central bank, the Bank of Japan’s former deputy governor Kikuo Iwata said, a controversial proposal that highlights the BOJ’s challenge as it tries to reignite an economy after years of sub-par growth.

That means Japan must lean on fiscal policy by ditching this year’s scheduled sales tax hike and committing to boost government spending permanently with money printed by the BOJ, he said.

“Inflation won’t hit 2 percent just with the BOJ continuing its current policy. The BOJ doesn’t need to change its policy much now. What needs to change is fiscal policy,” Iwata said.

“Fiscal and monetary policies need to work as one, so that more money is spent on fiscal measures and the total money going out to the economy increases as a result,” he told Reuters on Friday. “That’s the only remaining policy option.”

Instead of relying on commercial banks to lend more to already cash-rich companies, the BOJ should finance government spending for measures to boost consumption such as payouts or tax breaks for younger-generation households, he said.

His proposal resembles the idea of “helicopter money” – a policy where the central bank directly finances government spending by underwriting bonds.

Europe, now descending into what might be the death throes of its post-WWII single market plan, has one and only one chance to salvage it: Aggressive banking integration funded with extremely easy money.

And China, after accounting for 60% of the world’s new credit in the past decade, has decided that that wasn’t enough, and is now creating new credit at an even faster rate:

China’s banks made the most new loans on record in January – totaling 3.23 trillion yuan ($477bn) – as policymakers try to jumpstart sluggish investment and prevent a sharper slowdown in the world’s second-largest economy. Chinese banks tend to front-load loans early in the year to get higher-quality customers and win market share. But they have also faced months of pressure from regulators to step up lending, particularly to cash-starved smaller firms. Net new yuan lending last month was far more than expected and eclipsed the last high of 2.9 trillion yuan in January 2018. Analysts… had predicted new loans of 2.8 trillion yuan, more than double the level seen in December.”

China’s January new bank loans were 11.4% higher than the previous record from January 2018 – and 15% above estimates. Bank Loans expanded an imprudent $821 billion over the past three months alone, a full 20% above the comparable period from one year ago. Total Bank Loans expanded 13.4% over the past year; 28% in two years; 45% in three years; 91% in five years; and an incredible 323% during the past decade.

Which brings us to the strong dollar. Gold is actually up nicely in most other currencies, but a rising dollar has depressed the metal’s US price. Now, however, with a presidential election in which the choice is between Republicans committed to trillion dollar deficits basically forever and Democrats who are either quasi or overtly socialist, the dollar looks like a sitting duck at these levels.

Add it all up – newly aggressive fiscal and monetary ease, central bank gold buying, and political turmoil – and gold $1,350 is toast. Okay, eventually.

After an investigation conducted by the Covington Diocese turned up no evidence that 16-year-old high school student Nicholas Sandmann confronted Native American activist Nathan Phillips during a March for Life rally at the Lincoln Memorial last month, seemingly confirming that the mainstream press was incorrect to pillory the white, MAGA-hat wearing teen for a confrontation that never actually happened, lawyers for Sandmann filed the first of what are expected to be many defamation lawsuits demanding compensatory and punitive damages for leading an Internet mob that villified Sandmann and his peers.

According to Reuters, lawyers Lin Wood and Todd McMurtry are seeking $250 million in damages from the Washington Post on behalf of Sandmann, a sum equal to the amount that billionaire Jeff Bezos paid to buy the paper in 2013.

The suit claims that the paper – which helped publicize a now infamous photo that helped trigger an Internet mob that swiftly outed the teen and demanded he be punished – led the hate campaign against Sandmann – and failed to practice proper journalistic due diligence – “because he was the white, Catholic student wearing a red ‘Make America Great Again’ souvenir cap on a school field trip to the January 18 March for Life in Washington, D.C. when he was unexpectedly and suddenly confronted by Nathan Phillips (‘Phillips’), a known Native American activist, who beat a drum and sang loudly within inches of his face (‘the January 18 incident’).”

Not only did the diocese’s investigation corroborate the students’ version of events, but it also found no evidence to support Phillips’ claims that Sandmann and his fellow students had been chanting “build the wall” at the time of the confrontation. What really happened – as is now widely known – is that the students, who were marching with the pro-life rally, were verbally accosted by the Black Hebrew Israelites, who hurled homophobic slurs at the students and accosted them.

“In targeting and bullying Nicholas by falsely accusing him of instigating the January 18 incident, the Post conveyed that Nicholas engaged in acts of racism by “swarming” Phillips, “blocking” his exit away from the students, and otherwise engaging in racist misconduct,” the suit read. “The Post ignored basic journalist standards because it wanted to advance its well-known and easily documented, biased agenda against President Donald J. Trump (“the President”) by impugning individuals perceived to be supporters of the President.”

The Washington Post’s Vice President for Communications Kristine Coratti Kelly told Reuters “We are reviewing a copy of the lawsuit and we plan to mount a vigorous defense.”

Sandmann’s lawyers also accused WaPo of resorting to modern-day McCarthyism to “claim leadership of a mainstream & social media mob” of bullies who sought to attack and defame Sandmann. The suit also accused WaPo of publishing “no less than six false and defamatory articles”.

“In a span of three (3) days in January of this year commencing on January 19, the Washington Post engaged in a modern-day form of McCarthyism to claim leadership of a mainstream & social media mob of bullies which attacked, vilified & threatened Nick Sandmann, an innocent minor,” attorney Lin Wood said.

He continued: “The Post published to third parties without privilege no less than six false and defamatory articles of and concerning Nicholas, including two in its print newspaper and four online.”

According to the Daily Wire, Sandmann’s lawyers sent “letters for potential lawsuits to over 50 entities ranging from Democratic politicians to celebrities to media figures.”